2013

Tuesday marks the dawn of the fifth year since the wheels came off. It opens in typical fashion. More volatility. Another political-economic slugfest. A chorus of doomers wailing the end is nigh, while most people just want to get by. What will 2013 bring, and what should you do about it? Here are ten things to start with.

Oh good. Another crisis. The year could well open as America goes over the fiscal cliff. Markets will roil as the politicians screw common sense and Tea Party zealots choose chaos over compromise. When they lose this fight they’ll start another over the debt ceiling. The results are predictable – weeks of turmoil and wild swings on Wall Street. Just as happened in 2011, it will be another buying opportunity. In September you will so wish you’d bought those equity ETFs in February. More below.

The condo virus spreads.As headline-grabbing as it was in 2012, the collapse in the condo market has barely started. In all major markets, Toronto, Montreal, Vancouver, Edmonton and even testo-drenched Cowtown, projects will be cancelled, sales will melt and prices fade. But this is old. The real impact will be the chill that spreads to the SFH market in 2013, as armies of potential move-up buyers are trapped in their cement boxes in the sky. If you have a house to sell this Spring, in a middle price range and not in a traditional demand area, may God help you.

Born in the Seventies? Too bad. A grovely economy with imperceptible job growth, erasing white-collar positions and ongoing devaluation of a university degree – plus nine million desperate Boomers – means it sucks to be under 35. Get used to it. This is just the start. Plumbers are the new lawyers, and people smart enough to get MBAs should realize that borrowing money to start a business makes way more sense than investing in another degree. The contract IT guy who keeps the office online is the one who will get the Porsche first.

Fix your mortgage, now.When Mark Carney sails off in June look for the BoC to get way more interested in normalizing interest rates. Quarter-point hikes starting on October will be a modest start, but now that two-thirds of people have locked in to longer-term mortgages it’s the bond market you should worry about. Billions come up for renewal in 2014, and even more in 2015, when a five-year loan will be twice today’s 3%. If you have a VRM, lock it in by September and go long. If you have a renewal coming up later this year or in 2014, blend and extend.

Bonds’ big baggage. Carefully study what most people do. Ask the other daddies at the rink what they’re putting in their RRSPs this year. Probe [email protected] for her withering market insights and rapier recs. You’ll soon see that the Number One pick of most Canadians in woozy times is a bond fund, ‘because they’re safe.’ Wrong. A torrent of money will come roaring out of bonds and back into equities once it’s clear where corporate profits and US growth are taking us. Bond prices have only one way in which to move. More proof you will never, ever fail being a contrarian.

Why stocks are risky. Big S&P companies earned $1.75 trillion in the latest quarter, up about 12% from the same time a year earlier. These firms, in general, have paid down debt, become more efficient and productive (that explains unemployment), expanded markets and are sitting on mountains of cash. The biggest risk with stocks in 2013 is not owning a mess of them, preferably through well-diversified ETFs. Look for another year of double-digit gains, increasing dividends and preferential tax treatment. If you choose the orange guy’s shorts, however, expect negative returns after tax and inflation. And learn what ‘risk’ means.

Sell the ammo and tunafish. As this pathetic blog so richly demonstrates, a significant number of losers spend more time worrying about what happened in Zimbabwe, the US money supply or debt-to-GDP ratios than they do about their immediate lives. Big mistake. There will not be another 2008 in this generation as Europe has a further year of stabilization, the US economy grows, unemployment falls, American house prices and sales rise and corporate profitability augments. Hoard all the silver and toilet paper you want – at least one of them will be useful.

Strategy one: avoid tax. The feds and provinces have added more debt in the past five years than in the previous fifteen. Cutting the GST on the eve of a recession, for example, was a colossal mistake, helping achieve one mama of a deficit. With an aging population and more consumer debt than ever, Canadian families are vulnerable to what comes next: tax increases. Property tax, sales tax, user fees, clawbacks, surtax and bracket creep will inevitably follow on last year’s OAS attack. It’s not so much what you make, as what you keep. Tax avoidance is hot. I predict this blog will be full of it.

Why F will cave.In 2013 it will become apparent in Ottawa how much of a housing gasbag the government created, and how klutzily it was addressed. Just dropping mortgage amortizations by five years was enough to trigger a sales crash and plunge housing starts. Tossing CHMC insurance on million-plus homes and outlawing cash-backs was apparently overkill, as a staggering Vancouver will prove. Furiously lobbied by their developer friends, the feds will declare the housing market ‘fixed’ and throttle back. But the patient will still be dead.

The year Boomers bloat. If you think you’re sick of us now, just wait. In 2013 half a million people turn 60 in Canada for the first time ever. In fact in each of the next seven years another half million hit the same age – again, unprecedented. The greatest impact will be on the housing market since the majority of these people lack pensions or retirement nesteggs. Of necessity, many will sell, downsize or rent, ensuring a flood of listings and a glacial economy. Smart Boomers will exit now and embrace a balanced portfolio they can soon turn into an income machine. Dumb Boomers will check on the GICs, then drive their Kias to Costco.

You are right Garth – 2013 will be a great time to buy equities. we have had our correction, and by the time the cliff crisis is solved you want to be ready to pounce.
early January also coincides with the correction being over according to technicals. the sea comes in, the sea goes out…..just check the slow stochastics for oversold with a macd cross over and you are good most of the time. apple is a buy in the 400s too.

More food for thought. As the song goes “if the fates provide…” we shall meet same time next year.

Thanks for the pic. It’s a financial blog yes but from observation many different agendas and topics are covered (even marriage vs common law) some of which are called out as being off topic others, well, not. My hope is with this beautiful pic of my favorite dog with his brave young master will at least for one night inspire the cynics et al to take rest and be grateful for something or someone (my dad would say breathing counts!)

Warm wishes for the new year Garth and your readers. Maybe we’ll meet in 2013 at a seminar or for a consult.

Garth, I am just going back to yesterday’s article. in which you predicted no recession in US and 20% increase in S&P500. Wow! I know you are really good in real estate but this??? I believe we are in a period of about 17 to 20 years of stagnant stock prices, similar to 1966 to 1981, and 1929 to 1954. Recessions come and go, and you may be right that there will be none in 2013, but with each year the risk of US recession increases, as this cyclical bull market gets long in the tooth. There might be no recession in 2013, but any year between 2014 and 2017 looks like a very good candidate for it. Eventually, all this money which was printed will show up. It always takes a few years for it to show up, but it will, like in 1981.

If “F” and the gov’t cave on any of the common sense measures that they FINALLY brought back and that have allowed the possibility of a healthy housing correction, I’m leaving this stupid country for good. I was wise enough to buy a lovely home in Mesa Arizona last year and I will spend 4 months there and 8 months in my condo in southern Italy and live off of my considerable savings and investments. What a nation of fruitless idiots we live in.

“a significant number of losers spend more time worrying about what happened in Zimbabwe”

Yes we are mostly white and pacified in Canada, no way we would act like those mostly BLACK people in Zimbabwe hey Garth? I am certain your not implying only certain racial groups are capable of violence now are you? Just kills me when the politically correct show their true colors. Might want to have someone proof read your racist rants next time.

Don’t get me wrong your absolutely correct about the violence in Zimbabwe etc, but your dreaming if you think Canadians wouldn’t act the same way if those economic conditions assert themselves here.

I’m totally confused Garth …..Had a chat with a 27 year old at the coffee shop today …he said $600k is what you need to spend to buy a good house …he also said that in his age group you need to earn at least $100k per year to have alife ……This is all getting way out of line ….The more i talk to people the more they really think that this insanity can get up …..so in 10 years from now homes are $2 million and jobs are $250k ….never …..it’s all nuts

Garth, please thank your family for the time spent here educating us dumb asses. I ain’t gonna argue with your predictions. They make too much damn sense. Do take care and continue what you do each day on your blog. I enjoy and read daily. Thank you ever so much.

If fiscal and debt ceiling turmoil is going to run on for 2 months, how on earth does a person pick an entry point to buy? Buy a little on the bad dips?

And which ETFs? There are lots of new ones that do not have any history and market caps in just the 10s of millions? Are these riskier than others. Garth, you talk ETFs all the time but have never ever given any insight on what to look for and what to avoid.

“a significant number of losers spend more time worrying about what happened in Zimbabwe”

Yes we are mostly white and pacified in Canada, no way we would act like those mostly BLACK people in Zimbabwe hey Garth? I am certain your not implying only certain racial groups are capable of violence now are you? Just kills me when the politically correct show their true colors. Might want to have someone proof read your racist rants next time.

Don’t get me wrong your absolutely correct about the violence in Zimbabwe etc, but your dreaming if you think Canadians wouldn’t act the same way if those economic conditions assert themselves here.

I referred to runaway inflation. You’re ill. — Garth

Good to get a good belly laugh, nice one Garth.

Not only does it show luke8929 is probably the racist, quite likely a realtor too??

#16 – the 27 year old is totally right when it comes to living in Toronto or Vancouver. I’ve said myself to friends for a while that you need at least 80k + to live decently. A 50k or 60k salary in Toronto is almost poverty level lol. Once you add up all the bills for mortgage, property taxes, car, cable, phone, food, entertainment, etc, there’s nothing left. Oh by the way, rogers just raised all its fees about 8% for the new year!

To all out there, the fiscal cliff on Jan 1 isn’t going to happen. I am truly looking forward to the vast array of vial I receive from some of my Canadian cousins after reading the following post:

The fiscal cliff is merely political grandstanding. Of the $16 trillion debt the U.S. holds (and the U.S. is still quite easily the single largest economy of the world), much of it is sovereign debt. So, you can write that off the books today because it will never be repaid, nor does it have to be. And, to correct some severely inaccurate information provided in the previous string, Garth was 100% correct in stating the U.S. GDP is $16 TRILLION per year, not a trivial $15.5 billion that some claimed. The U.S. is going nowhere but up, baby, and employment numbers, real etate figures, company profits, and credible senior global economists all agree. This isn’t some British colony. Compared to all other major economies (if you can call it that when compared to U.S. output), th U.S. is rocking right now. The U.S. GDP to purchasing power parody is 20% of global GDP at purchasing power parody. Clearly, the U.S. drives the global economy and economic policies, and the USD will remain FIRMLY in tact as the global reserve currency until we and our children are all mere specs of dust. Despite the deliberate devaluing of the USD, it still remains the single most trusted and stable currency on the globe. It is the largest, by far, trading nation in the world. The United States is not in a debt crises, holding a 1:1 ratio of public debt to GDP, and that includes sovereign debt of which never has to be repaid. Instead, the U.S. of A is in a political crises, whereas the CONservatives have ben handed their asses to themselves on a silver platter, just as I said to all the non-believets this would happen. The right must reinvent itself, and it will take much political pandering and manipulation to win the next presidential election. Contrary to many Canadian beliefs, the U.S. is not representative of the Tea Party. On the contrary, they are irrelevant. Use your brains and look at the election results.

The U.S. is in a renaissance, including politics, technology, healthcare, manufacturing, environmental policy, foreign policy, moral issues, etc., and it is clearly the global leader in progressive thinking and know-how. Some countries are hitting maybe a point or two first, but not all of them simultaneously and on such a tremendously large scale.

So, for those who continue to root for the demise of the United States, go ahead. You will find yourselves on he wrong side of history, but more importantly and unfortunately for you, you will just be plain wrong.

1. Discounted canned cat-food disguised as foi gras, for Granny. Use your new high resolution printer you got for Christmas to easily relabel. Saves everybody the shame of not keeping up with the joneses.

2. Gift cards for 10 or more depression counselling sessions for the under-30 set.

3. ‘Offitels.’ A mix of hip downtown hotel room & office suite, rented by the hour, for the new mass of unemployed white collar dweebs in Vancouver and Toronto to pretend they still have jobs so their employed friends will continue to friend them.

4. Gathgrams. A new line of hallmark cards containing bitting but accurate proofs of recent dire real estate prognostications. When your neighbours’ house drops below their equity water-line (as in they haven’t got any skin left in the real estate game) you send em a Garthgram.

So, you would have an opportunity of a lifetime to invest (while the dollar is still worth something) OUTSIDE of North America, somewhere where the growth is and will be and live well with a decent standard and enjoy much better weather.

You might not want to be around when TSHTF. As a friend of myne was saying when leaving few years ago: He had much more laugh at his first month in his new place than in 10 years combined here.

Apparently the only enjouments he was having here apart from the stress (and he was ‘lucky’ to have a house…) was to sit in the smelly basement and browse internet.

If F back peddled then there is no more reason to be financially responsible and the goal will then be to borrow until one goes bankrupt with Canada. The harper government wants to bankrupt Canada and Canadians ? What a stupid country. F needs to tighten the rules even more and allow the free markets which the conservatives seem to hate to price interest rate risk properly . No more socialists CHMC but realtors, mortgage brokers and builders hate the free and open market. I hate conservative government who hate free markets and democracy.

At #192: Neo, the U.S. GDP is just as Garth stated at $16 TRILLION. It is NOT the trivial $15.5 billion you claimed. This ain’t Canada. I know it must be hard for you to wrap that tiny mind around, but you have ZERO idea what you’re talking about. Better luck next time.

American, that’s all well and nice but do you have any evidence if this because the facts on the ground say different.

Two other points, there is another party to the sovereign debt mainly china. Do you think they are going to stand by and not get paid? You will have to go to war with them to pull that one off.

Secondly, there is a little other problem of unfunded liabilities. 100 trillion that is owed to you own citizens not another country. We just saw today that no one can touch these entitlements for fear of political backlash so you will just have to keep throwing it on to the debt Foreigners won’t subsidize that forever.

The best analysts are predicting sub 3% growth for the future. What is the engine if growth that’s going to propel this higher? Answer: Stimulus. And that’s not real growth my friend. It’s ponzi.

Canada is a ponzi country. We need to con Immigrants with dreams that canada is the land of milk and honey as they work like slaves for low wages and go indebt just to survive. The big cities are the ultimate ponzi scheme where people pay top dollar for everything while old money makes a killing from new blood. If people ever figure it out canada will be in trouble. Lucky for Canada the masses are very stupid and easily lead by the propaganda machine.

Check again, neo. US GDP is 15.5 tri-i-i-i-i-i-i-lion. National debt is 16.4 trillion. Gross debt to GDP ratio 105%. So the US is like a young family earning $100k/year with a $105k mortgage, except they’re planning on never retiring because they can keep working forever… This according to usdebtclock.org.

“Sell the ammo and tunafish. As this pathetic blog so richly demonstrates, a significant number of losers spend more time worrying about what happened in Zimbabwe, the US money supply or debt-to-GDP ratios than they do about their immediate lives.”

Great Blog Garth
Small problem with some common shares I found amongst my Mom’s belongings.
I found Imasco Common shares, but from my searches, have determined that Imasco has been swallowed up by BAT…British American Tobacco.
The problem is I cant find out if they are still good or worth anything
Help from someone who knows their way around the stock market would be appreciated……..thanks
Happy New Year to all !!!

@#43 Gunboat denier10/31
Fed-up – you’re not even going to live here. WTF do u care?

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Well if you really need to know, I was born and raised here and have a ton of family and friends here. Beyond that, I feel that I have been forced to cash out in order stop having my hard earned money being exploited by a retarded financial system and government that rewards penniless losers and puts responsible savers at risk. Other than all of that, I really don’t care anymore.

You are tedious. This is not a PM blog. I use you only for comic relief. — Garth
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I am realy sorry to read this.
It is your blog after all. Certainly if you decide to selectively publish context you have the right, however the escuse is strange: I have read much more PM oriented postings than mine the somehow made it.

I found it also very strange that you lable me PM guy, or that my posts are comic relief.

I’m in my late twenties living as a single renter working in IT just trying to save money and progress through life without much debt at this point . I have about $10,000 that could be moved out of my savings account into some sort of investment.

What kind of reading material can help me with tax avoidance (sounds dirty) and investment strategies? Any recommendations would be appreciated.

“Plumbers are the new lawyers, and people smart enough to get MBAs should realize that borrowing money to start a business makes way more sense than investing in another degree.”

That’s the first correct statement you’ve made in recent memory. The building trades are running flat out right now and all indications are it will continue in GTA in spite of your much ballyhooed condo correction.

When your crap won’t go down the toilet you’ll call that plumber and you’ll likely get someone in his fifties because we can’t get people into the trades and you’ll pay whatever he asks.

Check again, neo. US GDP is 15.5 tri-i-i-i-i-i-i-lion. National debt is 16.4 trillion. Gross debt to GDP ratio 105%. So the US is like a young family earning $100k/year with a $105k mortgage, except they’re planning on never retiring because they can keep working forever… This according to usdebtclock.org.

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Ralph, you’re using the wrong figures. According to usdebtclock.org, the current ratio of debt to revenue at the federal level is approx. 16.4 trillion (US National Debt) to 2.45 trillion (US Federal Tax Revenue). US Federal Spend is approx 3.55 trillion which equates to an approx 1.09 trillion deficit for the year. So the US federal government is comparable to a household that has a $1.64 million mortgage which earns $245 k/year and spends $355 k/year.

If you want to use a ratio of debt to GDP, you would have to include all public debt (Federal, State and local) as well as all private debt.

While I share your enthusiasm with the resurgence of the U.S. economy, the numbers you are throwing around concerning gross public debt are not accurate or higher than you initially believe. Sites like this one:

Give numbers that are defined when one puts the cursor arrow over the heading revealing the problem with taking the numbers you see at face value. Essentially, headings are under select classifications. As an example, the link above classifies state debt at $1,092,000,000 trillion and falling but the heading only takes into account GO bonds and revenue bonds. The true collective state debtload is much higher (4.24 trillion 2011 stat):

Add 16.4 trillion federal with 4.4 trillion state and 1.7 trillion municipal and what we have is 22.5 trillion divided by oh, say, the 16 trillion you say it is and its 140% gross public debt to GDP give or take. I can only assume (oh the humility) as all of us can that every penny has been counted and none too dated so as to be within a +/- of 10%. Thats quite a different number than say, the number you see at the top of the first link which I’m sure gets 10’s of thousands of hits a day by those who believe everything they see is true and it is… if thats all you wish to see. Sadly, I sound like a loser just bringing it up when I read this:

” As this pathetic blog so richly demonstrates, a significant number of losers spend more time worrying about what happened in Zimbabwe, the US money supply or debt-to-GDP ratios than they do about their immediate lives.” – Garth

… but I will. Maybe its because I just want to know the truth of all things regardless of who it shames including myself. Maybe its because I have some twisted belief that knowing what other people don’t will somehow make me “superior”, y’know, beyond “better than” but straight to “above it all and everyone else” so I can self aggrandize and worship my superiority to royalty status (but really, why stop there) as the result of some twisted bitter aspect of being bullied, neglected or overly praised when I was formidably young. Perhaps its because I am a loser after all, not that I worry about gross public debt to GDP (Canada’s, I must admit, I do just a little) or worry for the future economic stability of Canada’s biggest trading partner or because i was raised (perhaps brainwashed) into believing we should pay back our debts but clearly the paradigm has changed when i see how banks expand credit beyond what most believe is a healthy threshhold, for the sake of self interests from all who participate and every few years or so, there’s a new normal that is bigger, bolder and larger than the last. Or… perhaps ego or self esteem has absolutely nothing to do with it, that I simply see all life as a test to which, on some level or another, failure and success makes equals of us all. Perhaps I actually get it, that money or lack thereof doesn’t make anyone richer or poorer either in the eyes of God or the mortician as you can’t take it with you, that its our capacity to give and recieve that makes us whole and weirdly, its only those who see all others as equals, regardless of gender, age, status, wallet size, looks, intelligence, health and even on occasion, personal hygeine, that truly grasp what it is that I am saying.

But that’s just me.

Clearly, the world’s largest #1 economy does set the rules for the rest of the world to live by or at least, tries to as much as it can so here we are, discussing whether or not the mistakes and poor leadership of the past can come back to haunt or whether the good choices of the present will be enough to fix the future as we stand on the cusp of another death of the old and beginning of the new Roman calandar year and the advice I have for you, American, and solely you is…

You should check with the bank you deal with regarding your question , but i would assume when the take over took place the money was deposited in your moms account, if not i don’t think there is much you can do about that now. The buyout took place around 10 yrs ago i think

@Snowbush
Thanks for your input. I suspect you are right about that. Its just that she had the physical certificates and thought it was the paper certificate that was of value.
I will take them to the bank for their assessment.
Thanks again

Alas, I’m an IT & Management/Consultant on big projects (some being the biggest business transformations in Canada). These are stressful but intellectually enjoyable. My clients like me and keep me around at Porche-like rates.

But seriously … a Porsche? That is so 1990’s when consultants got a job from school, traveled and didn’t need a place to live, just a few girlfriends in each port.

That was then, this is now … unlike my foolish friends, I ride a 1999 Mazda Protege. She’s from BC, no rust. It should be noted I care nothing about cars aside from point A to B.

My kids’ RESP are full, as are my TSFAs. I’m also considering not putting anymore in the RRSPs but simply keep that cash in the Corp (and investing from there).

My buddy still has his Porche and probably has sex more than I – being married sucks. But he doesn’t understand daddy love and knowing my kids have funds for University. I hope one of those kids doesn’t choose to be Manny the Handy man.

When do you reckon F will cave? Q3? Q4? What will the throttle back imply? Back to 30 yr or 35 yr ams? Will the BoC hikes expected in Q4 and the bond market implications be enough message and reality to keep the market cool and the patient from breathing again?

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“Tuesday marks the dawn of the fifth year since the wheels came off. The year could well open as America goes over the fiscal cliff.” — Seems to be a portly parallel of sorts there, with the wheels coming off then descending over the fiscal cliff. Time to open the golden parachute, or is it not strong enough to hold us? “Oh good. Another crisis.”0:13 clip Rahm Emanuel was the one who said the foregoing, so there has to be something in this crisis for him and his cohorts, courtesy of the WH.

Im the IT guy with the online shop, I prefer a Ford Escape to the Porshe(Cheaper and with the last snowstorm, i’m real happy about the AWD). Just wish i or my investor even knew what ETF was in simple enough language for an IT guy to understand and get started.

You’re sensationalizing again. But I guess generalizing about “doomers” goes over well with the Pollyannas.

2008 won’t happen again. But we’ll have a lot more years of no growth, slow-growth and lower living standards – GRADUALLY. More debt, fewer good jobs, higher deficits.

More socialism, too, because that’s what debtors like.

Things will get perniciously worse, but the masses won’t know it. Boiled frog syndrome. They’ll just gripe about taxes, living paycheck-to-paycheck, “the rich”, why they can’t afford this or that anymore and the price of gas.

Sure, “most people just want to get by”…head in the sand – but there will be some difficulties with that approach…

You keep your toilet paper…earn lots of it. I’ll keep the silver.
Nothing is “stabilizing”, because nothing is FIXED.

#23 Smokin Joe,
It should be no surprise to anyone that there are not enough employment opps for the 25-30 yr old demographic in Vancouver that pay T4 income of $80K-$100K to keep them here. Vancouver will have a very big problem over the next few decades if they can’t keep this group in the local/regional workforce. This demographic has been dealt a tough hand, not just in Van but in nationally as housing has run up.

F -Cliff related.
Obama and Harper proclaim: “Our spending constraints, are the same as yours. The Gov. must live within it’s means, like any families household”.
This “we are like you” rhetoric is shared in an attempt to make the masses more accepting of austerity or increased tax burdens.
When the seeking Cattle come here for truth, their told,

“The US will never default on federal debt. — Garth”
“Sovereign debt does not need to be repaid, and seldom is. — Garth”

Garth, you are of course 100% correct, but in the ‘optics’ of this realization, lies a problem. Every time you educate the good citizens to these facts, a little (fairy dies?) more confidence is lost. If Obama and Harper shared the sordid details of sovereigns in control and MMT on national TV, how would metals react, at the next market open?
How would tax collection fare, going forward?

Can’t spread the truth, can’t contain the lies. See the problem?

The economic wizardry that takes place behind curtain, is reluctantly being exposed and the Cattle will not like what they see.

Sick and tired of watching reruns of the house porn program “LOVE IT OR LIST IT” on Women’s channel,
F will abandon politics to host a program on the new Men’s channel. The program will offer a male point of view regarding selling or renovating.

#43 John
People are waking up. For myself, moving to Canada was a misery. But luckily I wasn’t a dreamer. My father came to Canada in 1965 as an engineer, saw nothing but lies, broken promises and “Canadian experience” scam. He surely left Canada for good shortly after.
I am guessing, since then things like communism in Europe and other issues helped fuel Canadian immigration. Also, selling Canadian passport under “investment program” worked fine until recently.
This is a pure ponzi scheme. That only explains why a house in Winnipeg would cost 400K. Similar house, same weather and same low-paying survival job can be found in Siberia but house will probably cost less than 20K.

Europe is not recovering as indicated by falling retail sales, car sales, housing sales, incomes, income tax revenues and raising unemployment. US is not recovering. The only reason for the decline in their official numbers is the fall in participation rate caused by baby boomers reaching retirement age, the extended UI coverage exhausng and students hiding out in school, borrowing to make ends meet and hoping to wait the recession out.

2013 stocks will fall as well as CAD. The only things that will grow are taxes and government debts – your money in someone else’s pocket.

TFSA’s will continue to lure in Canadians willing to lend their money to the government (interest free) for the sake of keeping it safe from the government.

Hey, you’re really scaring me with those REALLY BIG American debt numbers. Wait, no you’re not. Go ahead and divide net US debt, public and private, into US GDP and you’ll get a ratio which a typical youngish Vancouver homeowner would describe as ‘underleveraged.’ Compare to General Electric’s* balance sheet. The US is running a deficit right now because unemployment is high, meaning less tax receipts and more spending on welfare, medicaid and food stamps. This is counter-cyclical, Keynesian and compassionate.

The reason you and assorted other young hotheads are running around screaming about the debt is that you’re being used as ‘useful idiots’ by the Republican far right. Take another few laps around the sun with me and you’ll discover that, should the Republicans regain the White House, it’ll be back to tax cuts, Pentagon budget increases and big deficits, even in times of prosperity. Did Bush reduce deficits? Did Reagan? http://zfacts.com/p/318.html

* The answer to the question “Why the heck are they trying to resurrect the R&D tax credit, which expired a year ago, in the ’emergency’ fiscal cliff deal?”

People are waking up. For myself, moving to Canada was a misery. But luckily I wasn’t a dreamer. My father came to Canada in 1965 as an engineer, saw nothing but lies, broken promises and “Canadian experience” scam. He surely left Canada for good shortly after.
I am guessing, since then things like communism in Europe and other issues helped fuel Canadian immigration. Also, selling Canadian passport under “investment program” worked fine until recently.
This is a pure ponzi scheme. That only explains why a house in Winnipeg would cost 400K. Similar house, same weather and same low-paying survival job can be found in Siberia but house will probably cost less than 20K.
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canada is piece of frozen tundra with brainwashed frozen mind robots aka “proud canadians”.
canada is huge fraud, ponzy pyramid luring and cheating new immigrants to grab their money.

the fraudulent corporation “canada” will collapse soon, as former USSR.

Check again, neo. US GDP is 15.5 tri-i-i-i-i-i-i-lion. National debt is 16.4 trillion. Gross debt to GDP ratio 105%. So the US is like a young family earning $100k/year with a $105k mortgage, except they’re planning on never retiring because they can keep working forever… This according to usdebtclock.org.

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Ralph,

You do you realize post #192 was by The American and I was just responding to the last blog entry here. Pretty obvious since there we aren’t up to 192 comments in this thread. Nations historical that go over 100% have a very difficult time gettting their fiscal house in order without many years of austerity. Growth is subdued and below trend because of it. By 2016 Debt to GDP will exceed the post war record. Americans better plan on never retiring at this rate.

By the way, Fiscal Cliff is right. You are ignoring unfunded liabilities of $122 trillion. Also, using your household example you really should be using US tax revenue of $2.5 trillion vs $3.5 trillion a year in spending. In that case, a family would go bankrupt very quickly.

Thank God I drive a ‘Toyota’ and not a Kia … I don’t think my ‘extremely’ sensitive psyche and penchant for going into deep depression at the slightest criticism, or indication of me being disliked in ‘any’ way, could take it. If you question my priorities … tough …

At #41: Neo, you are a freaking moron. You need to educate YOURSELF and stop acting like a damn fool. Do you really believe there is only a GPD in the U.S. of $15.5 Billion? Hell, GREECE has a GDP exceeding $305 Billion. You are a freaking idiot!!! LMFAO!

Check YOUR stats. By the way, that clock you provided has zero to do with GDP. Can you even read?

I can go on and on and on all day with “proof,” but I live here and I witness the improvement each and every day, which is a lot more than I can say for you as you are beginning to see the demise of the Canadian economy (which will fare far worse than anything witnessed thus far in the U.S., mind you). Now, you made claim that “The best analysts are predicting sub 3% growth for the future. What is the engine if growth that’s going to propel this higher? Answer: Stimulus. And that’s not real growth my friend. It’s ponzi.” Where is YOUR proof of this claim?

At #45: Ralph Cramdown, THANK YOU for using cognitive thinking skills. You nailed it. In fact, Canada now exceeds the U.S. at a 109% debt obligation compared to its GDP as opposed to the U.S. at 105% debt obligation compared to its GDP. Who’s really better off here? LOL And let’s all not forget that much of the $16 Trillion public debt obligation of the U.S. is sovereign debt, of which never really has to be repaid. So, in essence the debt-to-GDP ratio is even lower.

Mark Carnage helped create the biggest bubble in Canada’s history and the longest lasting one in the western world. He is bolting before the carnage hits.

Also, one of the mandates of the Central bank is to maintain price stability. Housing is the most expensive purchase item for most people. Thanks to Mark Carnage’s zero interest rate policy, housing inflation has exploded for the young and first-time buyers.

He should’ve been fired for gross incompetence. But as in many sectors, incompetent people can get promoted.

It’s safe to assume that inflation only matters for the older, baby boomer homeowners.

AHAHAHAHAHAHAHAHAH! Neo and Not 1st just got annihilated by The American! Neo and Not 1st should stop with their anti-American agenda that so clearly comes out in every post they ever make. It is really pathetic and declasse.

Hi Garth,
I am pretty much onside with your predictions. The only notable difference being I think the takeoff in equities will occur later in 2014 and I am fonder of gold than you are. “The Reformed Broker” offered a lesson learned from 2012 being that the asteroid usually misses the earth. I thought that was good advice but that won’t stop me from keeping a few weeks of canned food and a few silver bars in the home. I was also thinking of getting a backup generator and a rifle in 2013 but I don’t want to pay much.
Being a do-it-yourself investor since 1999, I am often wrong but as long as I can be right more times I will stay the course. 2 out of 3 is a good day for me. I am predicting real estate and the market indexes will be lower by about 5% by the end of 2013. However there will still be winners and losers in the stock market between now and then so I will be selling and buying. My basic plan since 2011 has been to accumulate dividend paying stocks and sell my resource (mainly gold) companies. Gold treated me well until 2010. One of my best investments was buying a small gold company called River Wheaton back in 2001 which became Goldcorp and Silver Wheaton. I am also betting that gold/silver prices will be flat during 2013. Despite my intents, I still got holding Great Basin Gold (GBG) and Centamin PLC (CEE) in 2013. GBG was particularly painful. My advice is if you can’t stand the pain of your mistakes, EFT’s are the best answer because you get professional management at reasonable cost.
I haven’t read any of your books so I don’t know if you have already covered my thoughts. In regard to sovereign debt, I am watching Japan to see how their experiment turns out. I think I will be watching Canada’s future regarding entitlements and debt. I was also thinking since our political leaders can’t control their impulse to spend other people’s money, what are the chances they would repeal the tax exemption for principal residences (cue the pitchforks, torches, tar and feathers). Continuing along, if our elected representatives should decide that principal residences were taxable capital assets then according to our tax code, mortgage interest should be tax deductible. Given that we pay more interest than capital on a 25 year mortgage, most home owning Canadians would end up with capital losses on their home (it looks like we have some clever bastards in Ottawa). Obviously, the Canadian principal residence exemption is not going to be repealed. So I read in the media that the US mortgage interest tax deduction may be reduced and the taxable capital gains level will be raised. I am watching to see if the US elected representatives have the guts to pull that one off.
Thoughts de jour. Best wishes to all for 2013.

Well, if Jim flaherty want to back pedal because of pressure from the *Furiously lobbied and developer friends.*
I think the 5 millions readers of this blog should start their own private pressure to make him go strait and apply more pressure on real estate not less. The email of Jim flaherty : [email protected]

The ratio of federal debt to federal revenue will get much worse when unfunded future liabilities come due in the coming years and decades. In the comparison with the household I noted in my previous post, the household can also have unfunded future liabilities, but those liabilities (commitments to pay) would be a fraction of their total outstanding debt. As Neo stated, if the unfunded liabilities at the federal level are $122 trillion, the current unfunded multiple is 8.44 (16.4 +122/16.4). Big difference, why? Because households can’t issue Treasury bills, Treasury notes, Treasury bonds, and Treasury Inflation Protected Securities and they definitely CAN’T PRINT MONEY.

It’s amazing that if a household print’s money, it’s called counterfeiting. When the Federal Reserve prints money, it’s called Quantitative Easing.

Lot’s of America bashing here today. Good, they are an easy target. Don’t forget how much the so called War On Terror has cost the US economy to keep us all safe.

Many sources put the number much higher if the cost of rehabilitating the casualties are calculated. And the war machine keeps turning!

———————————————————-

War on Terror Spending to Date

Combined, the increased above-budget security costs between FY2001-FY2013 was $1.452 trillion. This was a significant addition to the U.S. debt. However, you rarely see this debated as a potential area where costs should be cut. The only Presidential candidate who brings it up is Texas Republican Representative Ron Paul.

Lies, Damn Lies and Statistics, 70 percent of people born in the seventies are over 35 by the way not under. Sucks to be under 35 really? Right-o let’s have a contest, anybody under 35 want to change places with say Rupert Murdoch or how about Warren Buffett, or let’s see equal opportunity here Gina Rinehart richest woman in the world – NOPE NO TAKERS – enough said.

I have learned a great deal from this blog. Many of Garth’s predictions and much of his analysis has proven to be accurate. I can only hope that his “plumbers are the new lawyers”prediction is as accurate. At least in terms of pay, not in public esteem. Since 1994 our wages have just barely kept pace with inflation. Happy New Year.

F will cave:
It’s like I said all along. The government will not allow a full scale american style meltdown here in Canada. We are Canadians . We won’t tolerate the specticle of ordinary Canadians being turfed out of their homes by the bailiff. It’s political suicide. F is going to do what ever it takes to maintain the soft landing.

Great 2013 wishlist, Garth! I can only hope the wishing well spirits grant them.
My personal 2013 wishlist is that the whole P-Scheme does not go full-stop in weeks up here, as it certainly will in Europe and Japan.
I’m off to dropping some pennies in the water. Actually scratch that, once the deflationary thundering spiral starts at lightning speed, I might need those pennies in the piggybank.

$15.5 billion instead of trillion was an obvious typo. Not sure why you are harping on that so much. Garth new what I meant and wasn’t an asshat about it like you. USdebtclock has real time debt AND revenue data. The debt to gdp AND GDP in real time is right in front of your face. Can YOU read?

How exactly is Canada’s debt to GDP 105% when our GDP is over $1.4 trillion and our national debt is just over $600 billion.

@The American, post #24 (and many others)
I’m glad I bought all those U.S. stocks and equity funds at fire sale prices! I look forward to this time next year, when my best Christmas present will be generous capital gains and dividend increases!

@futurologist, post #96:
The vast majority of immigrants I’ve talked to tell me coming to Canada was the BEST move they made in their entire lives and would only go back to where they came from if forced to. Consider that, if Canada is such a bad place to relocate to, why aren’t there as many or more immigrants leaving Canada as there are arriving?

But I also have an MBA and what Garth says makes a lot of sense…starting a business and staking a claim, but with 2 little ones there is only so much energy to go around.

Consulting can be pretty lucrative, paying yourself a decent wage and keeping the rest in the corp as your retirement plan much like Dr’s and lawyers. I find that the downside is that you end up working all the time.. feast/famine mentality. But once you get your rate up around $100/hr there is room to take some time off. 2 weeks in Maui in Jan should help! The alternative of full-time with 8 weeks off, every other friday, bonus, options, psu’s, has a certain appeal as well, decisions, decisions.

As I mentioned before there is lots of work in Cowtown for IT, most companies have a back log of work to do and not enough people to get them done, and by the time you finally get them done, there is another whole slate of projects to do.

As for real estate, the neighbours house sold quite quickly, he was asking $595k which I thought was low but shows if you price right it will move. Another place has been asking $659k and it has been sitting for quite awhile while a similar place sold quickly at around $640k???

I was wise enough to buy a lovely home in Mesa Arizona last year and I will spend 4 months there and 8 months in my condo in southern Italy and live off of my considerable savings and investments.
————

Sounds fabulous! There are probably 10 million Canadians who secretly wish they could do likewise. I’m one! All the best.

The vast majority of immigrants I’ve talked to tell me coming to Canada was the BEST move they made in their entire lives and would only go back to where they came from if forced to.

if Canada is such a bad place to relocate to, why aren’t there as many or more immigrants leaving Canada as there are arriving?
———–

First of all, if you are “proud canadian” most of immigrants will NOT tell you the truth, not to hurt your canadian feelings.

Second, do you know how many immigrants are going back to home countries? do you have statistics?

a lot of immigrants are coming back to home countries, or living periodically in both countries.

Immigration is hard process, after couple of years in f..n Canada many of immigrants are realizing they were cheated by canada. Canada needs Pizza delivery boys and exotic dancers, but not skilled immigrants.

After few years in this stupid country, wasting your money is extremely hard to go back.

But if canada will compensate immigrants for luring and cheating them – many of them will go back.

Today, with economic collapse of north america many folks will go out from canata, including canada-born folks.

118 fiscal cliff – I too like to use the household anology when discussing unfunded liabilities. If you take a
$50kpa wage which might allow a single person to live
on including all expenditures, taxes and savings, and
assume 45 years of work, it means over $2M
of “unfunded” liabilities for a 20 year old, even though they may never enter into debt.

American, every time the US wants to goose their economy, they ratchet up the deficit spending. As you can see this is diminishing returns as the amount of debt doesnt buy as much GDP as it used too, as Japan clearly found out too. If that debt clock is accurate, you’ll be at 130% of GDP in 4 years. Add in your unfunded liabilities to the equation and you are insolvent. I am not picking on the USA, it’s just simple mathematics. I pick on any country who claims to have a leading economy while tucking trillions in debt under the rug. That goes for italy, UK, france, Greece, etc etc.

The debt clock thing you keep clinging to clearly states “Federal Debt” and does not include Provincial, County, City debt, etc.

There is a lot of confusion about how Canada reports debt vs. the US. If you Google “Canada debt to GDP” you will find many sites, all reporting different numbers. It is a similar situation to comparing the US vs. Canada unemployment numbers. Canada reports using one metric while the US uses several. Canadian’s like to compare with the US U6 numbers. That is not an apples to apples comparison. I’ll bet that if Canada prepared unemployment numbers using the same methodology as the U6 the result would be a major wake up call for Canadians.

It is New Year’s Eve and I am spending time today communicating with friends and relatives that live north of our border. It seems that they all have spend this holiday season glued to American TV and if one more person asks about how much we are going to be hit financially because of the “Fiscal Cliff” or if we are on “Food Stamps” yet, I am going to start screaming.

The bashing of America needs to stop. Sharing a common border is serious stuff and should not be treated as a “Hockey Game”.

Sadly, this will be the trend. Educated, native born and bilingual (quad-lingual in my case), high quality Canadian citizens jumping ship as Canada allows politicians, banks, builders and mortgage pushing goons to drive the cost of living through the roof while the world’s unwanted and unskilled rabble keeps washing ashore in droves, using our money to live the “dream” that you and I once had to work our butts off to realize and attain. Ohhhhh Canada….

Rubbing my face in it now. Understandable I guess. What I don’t understand is why money supply and velocity is something you believe I’m not aware of. Care to explain?

Not at all… Just responding to your first post. Once confidence is gone there is no stopping Velocity, but it’s a symptom not the cause. M3 will be the cause or if you will, QE to infinity

The Fiscal Cliff is nothing more than white noise, as always the celling will be raised. But…. Austerity is a word soon to be realized to our southern cousins

#24 The American:

You will fail a drug test….. my God what a Rant of rubbish

The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011

#118
It’s amazing that if an individual kills someone it’s called murder. But when the Federal Government does it it’s called war. It’s amazing that when an individual locks someone in a cage in their basement it’s called kidnapping. But when the Federal Government does it it’s called imprisonment. What’s your point?

@127
“if Canada is such a bad place to relocate to, why aren’t there as many or more immigrants leaving Canada as there are arriving?”
Answer:
switching costs…most immigrants have spent ALL of their savings (and/or have borrowed money from family and friends) to come to Canada. In reality, there isn’t a way back for most of them

Garth, thanks for a great year of financial wisdom, humour, and contrarian thinking. For the life of me I don’t know how you put up with the daily bevy of idiotic questions, doomers, goldbugs, etc., but my hat goes off to you for managing it with such class and wit.

Sold a chunk of my CPD holdings today to move $5,500.00 into my TFSA tomorrow. Let’s hope the “fiscal cliff” gives everyone a buying opportunity by sending the lemmings over the edge. My portfolio is up in the low double digits and I thank you for steering me in the right direction.

Happy New Year Garth and dawgs! I’ll be toasting y’all tonight from the RE zombie apocalypse known as Kelowna.

The question about a US recovery (or not) is a tough one to answer. Statistically, it seems that the data coming up is showing some faint signs of life in the economy. But, I have talked to about eight or so people that I have had the chance to do business with in one way or another and only one expressed some optimism. His confidence was based on the shale gas drilling activity in ND. I just listened to his explanation of the uptick in his business sales (metal buildings to Williston) and couldn’t help but think it would be short-lived since the whole tightrock oil/gas play is basically a scam (as confirmed by plenty of industry insiders). As for the others I talked with, their local economies are reeling and the layoffs have continued unabated. This discrepancy between the official narrative via statistics and the anecdotal picture being painted by these people can’t help but make the former somewhat suspicious.

One other thing, I always thought that loading the economy with unproductive public debt to pay for bank bailouts, wars etc. was inherently deflationary, siphoning the population’s wealth to service the debt rather than spending that same money on goods and services. That is why debt matters, especially the derivative debt on and off the bank’s balance sheets, which will continue to lead governments into more bailout/stick-up situations. Maybe I am wrong though. I don’t know anymore.

Mr. turner:
I have just turned 60 and find myself in a dilema. Do I take my CPP early or do wait till 65. I am still working and hope to continue working till at least 65. both parents and grand parentls lived till their 90’s so I anticipate I will too!
How is CPP calculated for an individual. The last 4 years have been my best earning ever. Does that influence how much I would receive?
Perhaps you could devote a column to this topic?

The National debt in both countries is an accumulation of annual budget deficits/surpluses. Our figure is $602 billion the U.S. is $16.4 trillion. Is there off balance sheet debt that is hidden that could skew both numbers. Sure. But our debt to GDP is NOT the same as the U.S. They are worse. But all industrialized nations at this point are varying degrees of bad.

Awesome Pic G – you couldn’t have picked a better picture – when ever I want to pity myself – wonder why others have things that I can only dream about – this picture puts it all in perspective. We take too much for granted – a boy showing his love to his best friend – damn beautiful Garth –

#142 TorontoBull on 12.31.12 at 1:49 pm
@127
“if Canada is such a bad place to relocate to, why aren’t there as many or more immigrants leaving Canada as there are arriving?”
Answer:
switching costs…most immigrants have spent ALL of their savings (and/or have borrowed money from family and friends) to come to Canada. In reality, there isn’t a way back for most of them
————–
you are right

most of skilled immigrants sold their houses/condos in home countries, left good jobs, took all their pensions money – they have no place to go back.

They are wasting all their savings first couple of years in this f-n canada.

Canada is A TRAP for new immigrants.

Canada performing medical selection for new immigrants, as in concentration camps – health check as for “phantom” pilots, only the healthiest immigrants will be allowed to come to this f-n “paradise” aka canata.
May be because Canadian health care is a total bad joke.

Ballooned, inflating ago of arrogant “proud canadians” is disgusting. Those uneducated people, with frozen brain, knowing nothing about history and the world, speaking only “canadian” language, trying the tell to other people how gooooood to be canadian and how nice to live in frozen tundra aka canada.

The Court of Appeals disagreed and said that a claim of “by operation of law” could only be claimed by the FDIC and that a mortgage assignment from the FDIC to JPMorgan Chase still had to be properly recorded with the Register of Deeds

http://www.cbc.ca/thecurrent/episode/2011/01/17/filial-responsibility/
..”Now, the idea of a law that requires children to care for their elders may seem a little foreign… and it got us wondering if this kind of law could fly here in this Country. And to our surprise, we discovered that every province in Canada — with exception of Alberta — has legislation on the books that does just that.

These filial responsibility laws – as they’re known – have been around for decades. And while it doesn’t happen often, every once in a while a parent sues his or her adult children for financial support. Donna Anderson and her brothers are currently being sued by their mother. She was in Vancouver. ”

China: Parents can sue children for neglect

The Independent ‎- 2 days ago
Visit your parents. That’s an order. China’s national legislature amended its law on the elderly yesterday to require that adult children visit their …

#132 Gunboat denier
Your partially right when you state that household can have unfunded liabilities but the amount of liabilities are limited by their future income for the given period. The term ‘unfunded’ is misleading when comparing a household to the Federal government For example, a given household earns on average 50k per year over the next 20 years ($1 million). During this 20 year period, the amount of new liabilities they can incur is limited by the cost of servicing/paying down their existing liabilities. Household can’t borrow to infinity, they have to qualify based on their subsequent income to debt ratios etc. Federal Unfunded Liabilities are calculated by subtracting projected future tax revenues from the projected total cost of federal programs like Medicare, Social Security etc. The term ‘unfunded’ is the accurate explicative of the Federal Government. They can print to infinity.

—————————————-

#118 Fiscal Cliff on 12.31.12 at 11:05 am

#95 Ralph Cramdown
#100 neo

The ratio of federal debt to federal revenue will get much worse when unfunded future liabilities come due in the coming years and decades. In the comparison with the household I noted in my previous post, the household can also have unfunded future liabilities, but those liabilities (commitments to pay) would be a fraction of their total outstanding debt. As Neo stated, if the unfunded liabilities at the federal level are $122 trillion, the current unfunded multiple is 8.44 (16.4 +122/16.4). Big difference, why? Because households can’t issue Treasury bills, Treasury notes, Treasury bonds, and Treasury Inflation Protected Securities and they definitely CAN’T PRINT MONEY.

It’s amazing that if a household print’s money, it’s called counterfeiting. When the Federal Reserve prints money, it’s called Quantitative Easing.

The Toronto Stock Exchange is set to close out an underwhelming three-per-cent gain for 2012, which would place Canada’s benchmark bourse among the developed world’s worst-performing stock markets this year. 1:18 PM ET video

That’s precisely why a balanced portfolio makes sense. The S&P has a solid double-digit gain (13.3%), and a diversified investor should have enjoyed a 10% return this year. — Garth

Responding to #125: Neo, you said, “$15.5 billion instead of trillion was an obvious typo. Not sure why you are harping on that so much. ”

However,Neo, you said in the previous post of Garth’s at #214″ “Second, U.S. GDP is $15.5 billion not $16 billion on $16.3 trillion in debt. By 2016 it will only be $17.4 GDP on $22 trillion in debt. That will be a debt to GDP higher than the post WW2 record. Austerity will stifle whatever growth you think will allow then to “service” it.”

Clearly you were trying to downplay the size of the U.S. economy, per your OWN WORDS. Now you’re trying to chuck it up to a typo. Coward. The reason I am “harping” on it so much is because you are creating false data from thin air to try to support your lame-ass argument. You have lost ALL CREDIBILITY.

#131 futurologist on 12.31.12 at 12:11 pm
cheated by Canada???
yeah we sure screwed them boy…
where do you get this stuff? you just make it up ?
the vast majority of immigrants to Canada would NOT go back.
hurt our feelings ??? spare me please.

The fiscal cliff will be fixed. Here’s why. The virus (corporations) shouldn’t kill the host(workers). Manageable inflation keeps the workers just above water and the corporations alive. Deflation kills the corporation puting to much power in the hands of the workers. Deflation will be stopped.

Revealed: how the FBI coordinated the crackdown on OccupyNew documents prove what was once dismissed as paranoid fantasy: totally integrated corporate-state repression of dissent

…”The Partnership for Civil Justice Fund, in a groundbreaking scoop that should once more shame major US media outlets (why are nonprofits now some of the only entities in America left breaking major civil liberties news?), filed this request. The document – reproduced here in an easily searchable format – shows a terrifying network of coordinated DHS, FBI, police, regional fusion center, and private-sector activity so completely merged into one another that the monstrous whole is, in fact, one entity: in some cases, bearing a single name, the Domestic Security Alliance Council. And it reveals this merged entity to have one centrally planned, locally executed mission. The documents, in short, show the cops and DHS working for and with banks to target, arrest, and politically disable peaceful American citizens…”
(the guardian uk)…

I came back from Vegas yesterday, and where is the recession, as cash was flowing everywhere. I hooked up with a local gal from KY, as wanted to hit the crap tables at the Luxor – nice gal with class. She made bets for me, as do not gamble, and said just throw the dice. I became a winner, and she said ok all in for the next roll, and the crowds were cheering. Again, and again; then the eye in the sky came down as management does not want to see a winner. To make a long story short we were banned, and was cut a check that made a huge discount for the IRS. Yep, won a bit of money, but in Vegas they don’t want to see a winner. They even threw out the pit boss, and kept throwing the dice, as this gal from KY corrupted me, and the crowd at the table followed, and all went nuts. This is when the management stepped in to say my time was up, and to move on.

Gross public debt is at 109% as of June this year according to statscan. If you wish to channel your hostile energies on research (its healthier), try this link so that you can perhaps suggest to the american that collecting state debt is much higher than the 1.092 trillion he believes it is and as a consequence, gross public debt to GDP is much higher than he believes as well. The devil is in the details. In that way, you both can go to bed tonight knowing that you are both more knowledgable and perhaps even more humble than the night before, a good start towards the new year and on that note, may you both have a Happy New Year!

#161 futurologist on 12.31.12 at 3:51 pm
speak for your self there ‘futurologist’
I live in Vancouver, a city on the west coast of Canada where humming birds hang around all winter be cause it ISN’T cold…

I totally agree Bill. Why take your former starving, and in some cases, criminal asses back to the old country when you can live off of the backs, savings and social programs of the people that built this crumbling country??? Live like a self-entitled, carefree moviestar to boot, thanks to financial geniuses like F, C and H.

So, American political negotiators are working feverishly against a New Year’s deadline in a last ditch do-or-die effort to avert economic calamity. If they should fail, the entire American financial system will turn back into a pumpkin at the stroke of midnight.

Brinksmanship is tedious. I worked many years in engineering. This is the unwritten rule: Always ship new products at the last possible minute, preferably with many hours of unpaid overtime in a few final, frantic days to ensure everyone looks heroic thus providing plenty of ‘commendation material’ for the company newsletter and demonstrating your team’s deep commitment and reliability.

I saw such pointless dramas played out often but my attempts to introduce sanity on subsequent projects were fruitless. I was accused of ‘poor sportsmanship’ for suggesting it behooves us all to get started sooner rather than later.

There’s no room for cowboys in that scenario. No possibility for John Wayne to “head ‘em off at the pass”, then ride in and save the town. And it certainly leaves no time to surf the net until everyone wakes up a week before the trucks arrive at the shipping bay.

Must American politics model itself after TV and movies? It’s a tired old script.

“People are definitely coming back,” says Sujata Sudarshan, CEO of the Overseas Indian Facilitation Centre, which tries to pave the way home. “Younger people are coming for the opportunities, and older ones for security.” About 100,000 are said to have come back last year, and the number is growing – as is a similar reversal that is beginning to take hold among Chinese expatriates.

#163 bill on 12.31.12 at 3:57 pm
I live in Vancouver, a city on the west coast of Canada where humming birds hang around all winter be cause it ISN’T cold…
——-
it’s 364 days from 365 rain in this mud city
you are typical canadian, you even can not understand what is “not cold”.

#162 Iceland,Alberta on 12.31.12 at 3:55 pm
Futurologist,
Why don’t you ask your dad for a loan and LEAVE!
Don’t let the door hit you on the way out.
————
because your canada should compensate us for its fraud.
and don’t let the roof of your canadian crappy house from wood shredding to hit you.

Imao, as this crap table was shut down at the Luxor, and knew nothing about this game in the least, as this gal from KY who lives in Vegas did the betting, and just threw the dice. Now the crowd around the table saw a winner and followed me throwing the dice; yes the powers to be changed the dice on me. This table in 30 minutes lost $500,000, and have no idea was I was banned for just throwing a pair of dice. Vegas was a blast.

My #73 does have one critical mistake that I should address for readers as well as some clarification with state debt. (can’t have known errors out there, that would simply add to the unknown errors, no, can’t have that :)

The U.S. debt clock doesn’t account for the balance sheet. The U.S. balance sheet has assets that can be applied against debt:

The liabilities, from what I am aware of (someone feel free to correct me if I’m in error) have already been accounted for in the U.S. debt clock. The assets however from what I can tell, have not and it adds up to $2.9 trillion. So lets do the math. We’ll concede with the American that GDP is at $16 trillion in part, because its impossible to prove. 2012 hard numbers aren’t out yet. It is theoretically possible that the number is accurate so:

Add 16.4 trillion federal with 4.24 trillion state debt and 1.7 trillion municipal and what we have is 22.5 trillion in total debt. Subtract $2.9 trillion in treasury assets and we have $19.6 trillion in total debt. 19.6 divided by 16 = a more realistic 122.5% debt to GDP ratio. I’ve maintained on this blog most of the year that U.S. debt is between 115% to 125% or more specifically, 115% and then mention the issue of unfunded state pension liabilities but really, there are two shell games going on with state debt. These are changes in debt classifications that have to do specifically with unfunded (and funded) pension liabilities and payments for programs that are delayed into the new fical year.

Again… the U.S. debt clock only considers 2 types of government bonds with its total state debt but that’s not all there is to it. There is the fiscal year 2013 budget gap (payments for programs that are purposely delayed into the new fiscal year), outstanding unemployment trust fund loans, unfunded other post employment benefit liabilities, and the state’s unfunded pension liabilities. This last item takes the biggest dent.

So am I to hype it up like the american does that state debt is a mere trillion or am I to go with a more realistic $4.24 trillion? I’ll go with the $4.24 trillion readers, and the gross public debt to GDP numbers I’ve given on this comment (and most comments past as I’ve been here before, its all old hat) and when it comes down to assessing risk, pay careful attention to fiscal policy as that decides now, more than anything else, how to assess risk.

SI, I respectfully disagree once again with your assessment of Q.E. to infinity. One of the things that I think need to be noted with Q.E. is that U.S. deficits have grown so large that there just aren’t enough lenders around to meet that kind credit demand. Its not simply a question of raising interest rates (that would kill any kind of housing recovery and thus, economic recovery not just in the U.S. but elsewhere), there simply isn’t enough money around the rest of the world to meet this kind of credit demand. More than half of the U.S. federal deficit was met with Q.E. last year so I can appreciate what gave birth to your belief that the U.S. will Q.E. to infinity but think. The way the government handles fiscal policy from here is a game changer should they so decide.

I read a link here this aft that sheds light on a deal being close and if its true, tax revenues pop by $600 billion, the deficit is chopped by a little more than half and the markets will definitely react:

… anyhow, my point? They don’t need another Q.E. to keep things rolling along if the numbers behind the link prove up. You can talk M3 and velocity all you wish but Q.E. is around to lend cheap money to the government that the bond markets won’t. When suddenly the government’s need to borrow is slashed by less than half, what do you think happens next? I’ve laid it out yesterday and I could rinse and repeat with comments past but I would definitely rethink my views on gold if I was you.

#140 rosie on 12.31.12 at 1:40 pm
#119
“It’s amazing that if an individual kills someone it’s called murder. But when the Federal Government does it it’s called war. It’s amazing that when an individual locks someone in a cage in their basement it’s called kidnapping. But when the Federal Government does it it’s called imprisonment. What’s your point?”

Point is it costs a lot of money to keep the war machine ready to conquer countries. You may find it amazing but it’s wrong no matter how you slice it and it is a big contributor to US national debt.

“there simply isn’t enough money around the rest of the world to meet this kind of credit demand.” – daystar

Well… there is enough money but to soak it up from the rest of the world through higher yields presumably, no, there isn’t. Anyhow, the U.S., as the american states, has in nominal currency, 1 out of every 4 dollar equivalents in the world. Its about market share, readers and there are two ways of looking at it. There is market share in nominal dollars and then there is market share in PPP or Purchasing Power Parity.

Nominal dollars are at 25% of all the world’s currency while PPP is at 20% (I’ll go with the american on this one, haven’t looked it up). What fiscal tightening does, in case readers haven’t quite connected the dots, is strengthen the dollar so the U.S. has 25% of the currency market share but what we’ll see now is the strengthening of PPP. It won’t be overnight. If U.S. politicians walk away with a fiscal cliff that generates $600 billion in revenue (which, btw, is higher than the numbers generated without a deal, how ’bout that), its not hard to see where the U.S. government is going with their fiscal policy and the true carot is increased PPP. One more post and then I’m off to celebrate the New Year ;)

So, there will be no vote today on whether Americans want to go over a cliff. Maybe they’ll vote on it after the hangover passes. Once they decide whether or not to go over a cliff, they will have to decide which one? There are some impressive precipices in the Grand Canyon (with very nice vistas, as well). Perhaps they’ll choose of those. Certainly there is enough space for them all there.

The S&P ramps up 1.7% into year’s end. Apparently, HAL 9000 doesn’t care if Americans fall over a cliff. But then why should he? If Americans actually go over a cliff, Bernanke will toss in a bunch of cash to cushion the fall, which HAL would love.

For those discussing American debt:
16 trillion is the national debt as represented by outstanding treasury securities. Total US debt is actually 58 trillion. If you can believe the numbers, you can get all the gory details here: http://usdebtclock.org/

As you reconcile savings per family of $5,098 against debt per family of $694,000––happy new year!

How exactly is Canada’s debt to GDP 105% when our GDP is over $1.4 trillion and our national debt is just over $600 billion.

#125, include provincial and municipal debt into those figures. Don’t forget, if $ number of mortgages over and above CMHC’s reserves go under, the Feds are responsible for the those and CMHC has almost $600 billion on their books.

#169 vic dude on 12.31.12 at 4:28 pm
they are annas massena ‘s hummingbirds
they hang here all winter.
we have many more now that a lot of people feed them .
I have a male that sits in the ginko tree on my balcony during really inclement days . gives the evil eye to the cats but otherwise just chills and sips the nectar.

For example, the Federal Reserve is printing $40 billion dollars per month in mortgage backed securities (MBS), each and every month, in order to buy properties in the United States. The total estimated real estate worth of the United States is placed at a little over $23 trillion. When one begins to calculate the real estate acquisition power of the Federal Reserve’s MBS program being done with OPM (other people’s money) – i.e. your money and my money – one does not have to be economic expert to spell the word feudalism. Just like in the movie, Hunger Games, the government will soon be the major landlord in America as it moves to control all important resources.

Does the current mortgage-related fraud make a little more sense to you now? Does the collapse of the housing bubble, which significantly lowered the net worth of the nation’s real estate market come into play as we watch the Federal Reserve gobble up $40 billion dollars of property each month at dramatically reduced prices brought on by their illegal Wall Street Ponzi schemes? Even Ray Charles could see that these events are not coincidental. But hold on to your hat, as this is just the beginning.

ALSO:

On August 9th of 2012, the 7th Circuit Court of Appeals ruled that once a depositor places money in the bank, the bank can do whatever they see fit with your money. In other words, the assets in your bank account could be stolen tomorrow and there is not a damn thing you can legally do about it. The canary in the mine for this violation of the public trust took place with MF Global when Jon Corzine, former Goldman Sachs official as well as the former Governor and Senator from New Jersey, oversaw the theft of $1.2 billion in secured private investment accounts. In other words, this money had already been earned and was not at risk, but it was stolen; and the government overseer of this industry, CME’s Gary Gensler (a former Goldman Sachs official) refused to act on the theft of accounts overseen by Corzine. But it gets worse.

Do you remember that little organization called MERS which was caught selling multiple notes representing one individual mortgage note? Your mortgage note could literally be held by a couple of dozen mortgage companies that could move to foreclose on your mortgage note even though you are current on your payments. I did a brief check on my note and did a title search. Fortunately, I can only find one mortgage note to my property. However, when I looked at the mortgage agreement I have with Wells Fargo, it specifically states – in the fine print of course – that Wells Fargo retains the right to sell my mortgage note and is not responsible for the conduct of any party connected to the transaction. In simple terms, this is a license to steal. According the authoritative book, Clouded Titles, hundreds of thousands of properties have been stolen in this manner.

Now ask yourself, if you knew that you were about to lose everything, what would you do? Well, you would have a garage sale in which you would try and get as much value as you could for things that would not be of use to you following your economic collapse. This is what is happening today in America’s markets and the Federal Reserve is behind it. THEY KNOW THAT AN ECONOMIC COLLAPSE IS COMING AND THEY ARE TRYING OBTAIN AS MANY ASSETS AS POSSIBLE!

etc etc.
Financing mortgages through purchases of securitizations is not acquiring property. Do you actually believe this crap? — Garth

Gee Bill I was actually agreeing with you but giving valid reasons as to why many aren’t going back to their respective nations of origin. I am as Canadian as they get, born, bred and raised here, and have spent my entire working life in Toronto as well. Have started 3 successful businesses from scratch, have collected and paid millions in taxes and employed many. Was even a decent hockey player :p Heaven forbid I speak ill of the 3rd world Ponzi scheme this country has turned into. Is it so hard to accept the truth? Oh and BTW, the “Wet” Coast is a climatic basket case nearly 10 months per year, so please stop deluding yourself in that respect as well.

@futurologist, post #131;
As I said, I’ve talked to a lot of immigrants from various countries who say they would not be anywhere near as well of if they had stayed put. I was born here and, personally I think I won the lottery. I could have easily been born in a poor third world country, with nowhere near the life expectancy I have here. I could have been born in a country without a democratic government, and where human rights as we know them (and sadly take for granted) don’t exist. The list goes on and on. If living in this country, which has been judged by the United Nations as one of the BEST countries in the world in which to live, really bothers you that much then GET TO THE AIRPORT RIGHT NOW, GET ON A PLANE AND GO BACK TO WHERE YOU CAME FROM! There are plenty of others, more appreciating of the virtues of this great country we live in who would gladly fill the vacancy you leave behind.

Wrong again….. but did enjoy your self assessment… I suspect you may not be here for Chapters 17 & 18 I know I won’t – SI

I’m glad someone figured out what I meant by that. Garth has made a ton of predictions here today and to no small surprise of my own, I agree with them. All of them. I would like to augment with a few of my own because, in part, I like to personally assess risk for some reason. Perhaps its because there is a genuine love within me for this world and all of its participants and I want to see the true dangers the entire world never mind Canada is up against whether it be from the environment, the systems we’ve created financially or otherwise, or simply within ourselves. Perhaps its because of the ongoing participation for years with this blog and a such, I’ve developed a… habit of doing so, I don’t know. All I know is that I’ve learned a great deal from participating and reading the thoughts of others and I’m highly appreciative, especially to Garth.

I’ve thought about reducing significantly my participation on this site as I’ve found it to be quite addictive and distracting from the rest of what life has to hold and I’ve had to weigh the consequences of what will happen to my own evolution as I pull back from participating in the sheer volume that I have. In some ways, I’ll miss it. In others I won’t but I’ll still respect it. Either way, its been enlightening and I believe I’ve developed some true writing skills through it all that will come in quite handy in my elder years but all things have a time, place and cycle so its time for me to scale back, take what I’ve learned and focus my energies on other areas that need growth in my life. Whatever happens next, I have a deep sense of appreciation and gratitude for those who’ve taken the time to share their own thoughts even and sometimes especially when I disagreed and specifically a deep appreciation for our host, to whom, without his tireless efforts, none of us would be here. I’ve learned a great deal here Garth and I won’t forget where most of it truly came from.

SI, its likely that I will be here for it. I plan on living at least another 35 years with a cogent and lucid mind along the way. During that time one of the events I am sure to see is the disappearance of the Artic Cap.

One of the first things that we end up asking ourselves is, “my God, when will the artic be entirely ice free?” My best guess is not an iceflow in sight, nothing left for next year but virgin ice fully melted by 2020. by 2022, 2023, open water is all we’ll see in the artic by May instead of September. Please, read on. Its a long essay and the true meat and potatoes is after the beginning:

Now some will ask whether or not the subject of climate change is topical in this context. Is it topical? Well, yes, it is not simply because the earth is our true home and our true chunk of REAL estate but because the real estate around the flood prone coastlines of Florida and the gulf coast, Pennsylvania, Virginia, New Jersey and New York or essentially the entire east coast is under more serious threat to flooding than we realize. If Sandy taught us anything, its that major hurricane ocean surges combined with high tide can do huge damage but factor in the gradual thermal expansion of the Atlantic and go from there. How much damage would Sandy have caused if the storm surge was several feet higher as a result of hurricane intensity or thermal expansion? That could be as little as 10 to 15 years away, within my lifetime and the consequences of tectonic plate shifts from a rapid Greenland melt could also rip through the east coast within my lifetime. Never mind the prospects of a storm of greater surge and intensity than Sandy on real estate there, what could this do to the literal financial capital of the world, New York city? Yeah…. its Biblical. Yeah… its Chapter 17 & 18 at a reality theatre near you and yeah… you can call it doomer and alarmist, product of fiction, another excuse to tax and use all kinds of self interested reasons to justify, but one thing we can’t call it is boring or dull.

claudius emperor, and Fed up, I am glad I have come across people who are thinking what I am thinking. I really want to get out of here, considering the trend that has been happening, but were can I go ?

The debate goes on about how ethical owning (and receiving dividends from) tobacco companies is. I wrestled with this dilemma myself until I heard Derek Foster, the guy who retired at age 34, (see http://www.stopworking.ca) talking about investments. He pointed out that warnings have been on cigarette packs since the 1960’s, and the dangers have been well known since then. He also asked the question: how many people were forced, totally against their will, to start smoking? The point is anyone who starts smoking knows what they are getting into, and shouldn’t blame the tobacco companies. I’ve voluntarily taken up risky pursuits like whitewater sports, parachuting, bunjee jumping, and scuba diving, and was FULLY aware of the risks I was taking on.
To date, I own 200 shares of Altria (symbol MO on the NYSE) and may buy more if the price drops. At the price I paid, the dividend is about 7% and probably will go up. Tobacco companies are also recession proof. In the unlikely event to fiscal cliff isn’t resolved and the U.S. economy (and others like Canada will follow) falls into a recession, people will buy less luxury goods or take expensive vacations, but they will continue to smoke. A pretty good investment in these turbulent times, I would say.

–
New Year’s Eve and lotsa good posts. Still, 2:59 clip Frank Zappa was right on the money in the 1980s. Look what the west has evolved into now. Plus — Liechenstein’s Blog Any comparison to greaterfool.ca?
*Torn to Pieces This is what the fiscal cliff is for, an excuse to impose all types of new taxes on taxpayers, 5:23 clip Lou Dobbs — fiscal cliff nonsense, Shenanigans, which are aka polytix and fiscal drama queens, but y’all know how this plays out — War;Sperm donor dictatorship No comment needed; Pentagon Is this taken from a Python skit (Military Fairies)? Keynes and Marx Following them, Soros and Obomba.
*Iran“Given the US and Israeli governments’ war of words against Iran, who in their right mind would blame Iran for doing this right now?!?” wrh.com, and Empires of Illusion First they come for the weak (homeless, deadbeats etc.); 2:49 clip Ban crooked lobbyists / politicos plus most levels of govt. They’re unnecessary anyway; Islamophobia caused by mental illness. Call Dr. Phil! Shootings m$m obeys govt., ignores reality; 2:34 clip Mexican drug cartels heading in California; Striking Parallels Slowly winding down? Syria Russia sendiing another ship.

S…there it is….Obamas tax and spend ghouls have driven over the fiscal cliff raising taxes on everyone. Why wouldn’t they…look at the revenue they’ll rake in…while blaming the other guy for ‘not doing enough’…typical liberal greed……..another year of dead in the water while the elite civil servants collect their bonuses.

So far this year, hedge funds and bond managers have struggled to show their investors gains. According to Goldman Sachs, the average hedge fund has returned only 4.6 percent this year so far, underperforming the benchmark S&P 500 index by more than 7 percent. What’s worse – only 11 percent of managers were able to outperform the S&P 500.

According to the Economist, the S&P 500 has now outperformed its hedge-fund rival for ten straight years, with the exception of 2008 when both fell sharply.

#123IM in C F will cave: “It’s like I said all along. The government will not allow a full scale american style meltdown here in Canada. We are Canadians . We won’t tolerate the specticle of ordinary Canadians being turfed out of their homes by the bailiff. It’s political suicide. F is going to do what ever it takes to maintain the soft landing.”

#143Ogopogo: “Garth, thanks for a great year of financial wisdom, humour, and contrarian thinking. For the life of me I don’t know how you put up with the daily bevy of idiotic questions, doomers, goldbugs, etc., but my hat goes off to you for managing it with such class and wit.’

Thanks again Garth for your efforts. Finally finished reading Money Road, one of the best books I’ve read in some time, & highly recommended to those who havn’t had the pleasure! Anyways to You and everyone else here HNY!

#195 daystar on 12.31.12 at 7:56 pm wrote:I’ve thought about reducing significantly my participation on this site as I’ve found it to be quite addictive and distracting from the rest of what life has to hold and I’ve had to weigh the consequences of what will happen to my own evolution as I pull back from participating in the sheer volume that I have.

I hope you don’t pull back all the way, daystar. You are always worth reading, even when it’s a lot of work due to the length. We need sensible posts to balance the firsters and the nutcases, so you’ll be missed if you stop posting altogether.

Canada best country in the world, even though some of our here today gone tomorrow politicians are asses. We have bond that makes us great…….. The magic of minor hockey…… No outsiders will ever understand….

Thanks my friend. Most of us come here to read, to learn, to be entertained somewhat, get away from the drama and at other times swim in it. I’ve got a role to play. :) I don’t always get it right but thats what the rest of you of for (like for example my second last entry, can’t take assets from debt or gross becomes net. After all that? Gross public debt is still around 140%. The credit bar has been raised and my 73# in reality, was right all along ;) What does that make me exactly… a sophist?

I believe you to be one of the most gentlemanly poster here and its not hard to tell Derek. However long I’m around, its been good to read you.

I was going to take a couple weeks off with a spin and post this for fun but its time to get crazy!! Happy New Year!

#218 Smoking Man on 12.31.12 at 11:01 pm
The magic of minor hockey
…………………………………………………
I agree with my whole heart. This is a laterally transferable strategy. Canada must create its own game and master it in many fields such as research, economics, education as well as a host of others I am too dim to come up with. Thirty some million people have dominion over a massive portion of the world’s resources and we are convinced we can not live good lives but I am ranting. Ten seasons of minor hockey on 5 championship teams before I discovered girls, cigarettes and beer. Two settings, full bore and dead stop. Stood the whole game looking at the clock from the first exhibition game of the season to the last buzzer. The May hockey banquets were sorrowful events not unlike wakes (even in championship seasons). Summer was a dreadful period to be endured between seasons. Street hockey even at 30 below (but not 40 below). There were only two things to be as an adult, a Montreal Canadian with the cup overhead. Fight to the end.

At #206: Barry Lainof, I am honestly laughing so hard from reading your post that I could very well piss myself. I don’t know why, though. Maybe because I hit a toke of the white widow weed to help bring in the new year. Or, maybe because you are CRA CRA. Who the heck knows. But, THANK YOU for making this evening rock. (Better, Garth?)

Just like to say that it’s very hot here in Sydney Australia, the land of milk and honey downunder. You know I nearly emigrated to Canada 33 years ago…looks like we are your cousin country in a sort of ponzi way!!!Happy New Year

You know what makes for a truly successful blog? Participation. Volume is good! Virtually all of my posts (minus links which take the true time) take less than 2 minutes to read. Most take less than a minute. If thats too much trouble for you, maybe take some reading classes?

Criticizing volume is like criticizing a large newspaper because it contains more than several hours of reading. You know the answer, glaze it over! Cherry pick the funnies if reading takes too much effort. You don’t have to edit this blog, thats Garth’s responsibility and he’s the only one I will apologize to for volume. It won’t hurt my feelings if you or anyone else skips my posts because its too much effort. I don’t read every entry or every story of every day myself, I just don’t have that kind of time. Who does? Seriously, if you want to be taken seriously with your own criticisms, live a little, man up, grow a pair and try content like most of the rest of us. Happy New year just the same.

To #s 204 and 206 and all other America’s detractors – yes there is a lot of greed and violence and bull shit in today’s US but this is probably an uncontrollable byproduct of their innovativeness and creativity through constant research and development in many fields all driven by fierce determination to succeed. Because of this it IS the greatest country in this era and sweet, innocent Canada will never know that feeling of being on top but we can say we were (still are) part of the British Empire when it was the leader and unloved by the rest of the world.

Happy new year american. A few things come to mind upon reflection so I thought I’d share these thoughts with you. Gross public debt isn’t really the best indicator of true risk when it comes to sovereigns. Combined intergovernmental net debt is generally a much better indicator and the extent of external debt makes a difference but so does the combined debt pie (gross public debt, household debt and corporate debt to GDP as well as average incomes from all three). Its not as easy to find this information (gross public debt at times isn’t either) but its the best way to assess risk and thats just one part of it. Government assets such as crown land and corps factor in. Tax rates and trade surplus/deficits play a big role along with history, systems of government and leadership. Its all integrated, interconnected. Macro economics is simply put, complicated which is why so many of us struggle with it. Economists can train for years at some of the best schools and still not get it right so it shouldn’t come as a surprise if some of us look foolish here.

If there is one consistent figure out there that I’ve been impressed with over the years in terms of assessing risk, its Jim Chanos (as well as Pimco). The link below offers an alternative view for example with S/P techs, S/P’s sure to be a topic next year:

I know the boomers need to keep working bc of their financial mistakes but how can they when they have high BP, insomnia, diabetes, heart disease,cancer, anxiety etc etc I am a pharmacist and I give these boomers bags and bags of pills. They will HAVE to stop working whether they like it or not.

My boss is a boomer and she has dizzy spells several times a day from her 12 Rx’s. She owns a huge property that is half renovated (ran out of money) but refuses to sell.

She works 2 jobs just to get by, service debt etc THEN, she keeps bugging me about buying a nice house and not throwing away money on rent. I bite my tongue…HARD and smile saying I’m not interested.

Garth: All the best in 2013 to you and all the blogdogs. I rarely post, but read this blog daily. Thanks for the advise and all the opions expressed by the dogs.
Hopefully , you will make a swing through Nova Scotia this year.

So, balanced portfolio, but the bond portion (40%-60% of a balanced portfolio) is sure to die!? Hummina hummina…

Who said bonds constitute 40% to 60%? A mixture of preferreds should comprise half of any fixed-income portion, plus there are bonds, and then bonds. Government issues may be overpriced, but corporates, real returns and hi-yields are often not. Plus there are many durations and debenture types to choose from. I hope you are not your own counsel. — Garth

The eagles in Brackendale are worth seeing that’s certain and the first time i saw a B.C. blue jay i was living in Whistler, so different from eastern jays and yet recognizably a jay.
Super natural B.C. you’ve gotta love the sheer primal energy.

#197 Doug in London on 12.31.12 at 8:11 pm (and others who have looked at this sector).

I have limited exposure to big tobacco through an ETF. I have been investigating direct ownership due to the reasons you stated
-dividend,
-capital gains outpacing the index over the last 10 years,
-stability (No matter where else folks cut back, majority can’t seem to find the will to cut down their cigarette tab. Also, the GFC hit these guys with but a mild blip).

I have zero ethical concerns – I tried, used and quit myself. No one ever made me try it, continue with it, and quitting was a pretty mild struggle once I made up my mind. (Besides, I have plenty of exposure to bank stocks, and if you want to have scruples about profiting from the stupidity of others………:) )

Anyway, my concerns are limited to the ability of big tobacco to continue to profit in the future

-Smokers are dying, and are not being replaced at the same rate.

-Government agencies with unlimited resources, are fighting your product in every way possible – negative ad campaigns full of 3/4 truths, ridiculous taxation, ban on any kind of advertising, banning smoking anywhere except a smoker’s own residence, etc. Tobacco is an easy target, and kicking them in the nuts plays well with the majority.

-The market is flooded with ‘illegal’ cigarettes at half price, and I’m betting this is the growth side of the business…..the product sucks, but it’s cheap and hits the addiction centre nicely.

Also, the feds don’t seem to have the testicular fortitude to challenge First Nations and other gangsters to shut this down. All they do is continue to hike taxes on the legit product which drives more people to the contraband.

-Risk of a rogue judge and jury slapping these guys with a ludicrous judgement.

-Half-ass, five minute technical analysis on Altria suggests flattening trend and finding a top (or at least a plateau). Unless I’m going to put on blinders and pretend that this is an income play for the dividend yield (5.5% on Altria at present price…not bad! but also not 7%), I fear picking a profitable price/time entry point is tricky……would love to hear theories from experts.

Happy New Year everyone. Get ready for a great year in the markets, especially the metals. No more yellow helicopters flying around Richmond. No more line-ups to buy condo’s in Toronto and Vancouver. No more bidding wars. Sanity will return to the real estate markets.

Well folks, 2013 is going to be another h-ll of a year. They’re not letting up.
If someone told you Harper is following a plan to spend so much, to destroy our finances so well, that we’ll be plunged into an everything-must-change austerity scenario, would you believe it? Will you believe it?

As I say, we get economically bombed, the others get it worse. Look what they did to say Vietnam, Laos, now both compliant communisitic sweatshop countires . The War on Communism, natch.
Italy, I believe? An unelected interim PM was placed into power. Afghan, Iraq, now the corporate paradises for all types of companies. To be “rebuit”, after the destruction. That War on Terrorism, natch. Our heros.

Egypt: twitter did that, really? Or a supremely funded operation that removed a dictator, replaced it with an even more brutal one. Check out USA and others levels of yearly “aid” to Egypt. It did that.

I mantain that Iceland was the first test case. It’s an isolated, homgenous test bed. The pefect test. It worked and the model was spread elsewhere.

Coming soon to a democracy near you.

Still you can choose to opt out, live your life as intended. Just turn off your tee-vee. It’s a war for your consciousness. Shop till you drop? Turn on, tune in, drop out?

#213 TRT onDaisyMae: “I just don’t see any carnage here In the suburbs in Vancouver….”

**********************

I don’t recall discussing ‘carnage’ in the suburbs of Vancouver…I DID say it was wet and mild at the coast.

At any rate, I don’t imagine listings are the important issue. They’ll be down in December. Many will list again in the spring hoping for a resurgence…and they’ll ask whatever they like. Sales are what count.

#246 sure you’re a pharmacist and your boss is what, a pharmacy owner making 10 times what you do? Give me a break. The ones taking the big bags of 12 meds are the 70 plus with their subsidized Ontario drugs where a rich old guys Viagra is covered but migraine drugs never. The average boomer isn’t even 55 yet, hardly prime drug taking time.

Happy New Year to you Garth, and to all the blog readers. For those who suffered tribulations in 2012, may they be lifted in 2013. For those who suffered illness in 2012, may you have good health. For those who suffered heart ache and pain, may you find grace and peace. Good wishes to everyone for the year ahead.

Blessings to you, Garth, for the upcoming year, and thankyou for your insightful, caring volunteer work doing this blog. And blessings to everyone else on this colourful blog; may 2013 bring you health, happiness, and peace of mind.

#217 these pretzels are making me thirsty on 12.31.12 at 10:57 pm
you dont like the rain?too bad it doesnt bug me . I also dont think vancouver is the ‘bestest place on earth”. whatever gave you that idea?
possibly you are an easterner digging out of the recent snow storm? and subsequently embittered about the whole thing?
well off to watch the hummingbirds at my feeder.
happy new year everyone

IT guys driving Porsche’s? LMFAO. IT employment has been in depression for much of the past decade. The ‘consulting’ area has been absolutely devastated as firms have largely turned their operations over to outsourcers that go overseas when they need labour.

“As I mentioned before there is lots of work in Cowtown for IT, most companies have a back log of work to do and not enough people to get them done, and by the time you finally get them done, there is another whole slate of projects to do.”

Not what I’ve seen. IT jobs in Calgary are quite rare, and the ones that do exist, at least for new-comers, have been spoken for a long time ago.

Hi Garth, any specific predictions on where mortgage interest rates will be at by the end of the year? We’re currently sitting at around 3.8%, ‘blending & extending’ will likely bump us up over 4% at least a little, depending on how long a term we choose. Depending how high you think they’ll get, would even a 10 year term at 6.5 or 7% make sense in the long run?

#17 wayne=you-know-what = *
If you would just shut it … or go away for a while … you might regain some cred …

====================

It’s ‘Dr.’ Wayne … only my friends call me ‘Wayne’

***********************

Well WAYNE – you are a little high on your “credentials” – it doesn’t mean you are smart – it means you can study and re-state the obvious. I’ve met a fair share of idiot doctors that can be replaced by google.

IT guys driving Porsche’s? LMFAO. IT employment has been in depression for much of the past decade. The ‘consulting’ area has been absolutely devastated as firms have largely turned their operations over to outsourcers that go overseas when they need labour.

“As I mentioned before there is lots of work in Cowtown for IT, most companies have a back log of work to do and not enough people to get them done, and by the time you finally get them done, there is another whole slate of projects to do.”

Not what I’ve seen. IT jobs in Calgary are quite rare, and the ones that do exist, at least for new-comers, have been spoken for a long time ago.

Then move. Lots of Porsches in the GTA. — Garth
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Mark – is this Kokanee Mark? cause if it is then he is bang on about the IT Market.

I do not see an MOI chart there, but I do see a DOM chart. Perhaps you are confused between the two.
In any case the charts indicate a grim picture for Kelowna. I see sales and prices trending down, while listings and days on the market are trending up. we shall see what the next few months bring.

Thanks for posting the charts. They are a welcome change from your impossibly long-winded and incoherent ramblings.

“170 Old Man on 12.31.12 at 4:43 pm Imao, as this crap table was shut down at the Luxor, and knew nothing about this game in the least, as this gal from KY who lives in Vegas did the betting, and just threw the dice. Now the crowd around the table saw a winner and followed me throwing the dice; yes the powers to be changed the dice on me. This table in 30 minutes lost $500,000, and have no idea was I was banned for just throwing a pair of dice. Vegas was a blast.”

Have a question for you Old Man…Playing craps in Vegas or anywhere..when should a player take odds??

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Exc. collection of posts. Make for great reading while the grandkids whoop it up elsewhere!
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THOUGHT FOR THE DAY! — “I am afraid the ordinary citizen will not like to be told that the banks can and do create money. And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hand the destiny of the people.” — Reginald McKenna, as Chairman of the Midland Bank, addressing stockholders in 1924 (wrh.com.)
*1:56 clip The fiscal cliff was a joke to let the govt. impose new taxes, and Tin Foil Hat Alert! Massive EMP could destroy economies in a second; Stir Crazy or A Tempest in a Teapot; The Feudal System New age serfs; HSBC Banxters walk; China The winners in post-Sadaam Iraq? Hollande won’t back down on 75% tax for wealthy, and Spain’s Austerity Pain deepening. Coming here soon.
*Antidepressants for Grief? If folks only realized there is only a hairbreadth’s difference between this and the next worlds, there would hardly be any need for grief; Iran sanctions on Turkey“That might make Turkey a little less enthusiastic about helping the US conquer Syria!” wrh.com, which possibly means that the US and Israelis are holding Turkey’s govt. hostage, and SArabia next? Quite probably; Lies, Damned Lies and the EUSSR;Diane Feinstein An interfering old busy body, and 1:44 clip The two-faced Ms. Feinstein; US arms sales At least one mfg. sector is still profitable, and US meddling Creating a China – Japan war, plus US – NATO – Israel meddliing“The United States has attacked, directly or indirectly, some 44 countries throughout the world since August 1945 . . .”;Biologically Modified Soldiers Read a link yesterday which said that by 2050, humans and computers will be one and the same. The Borg is becoming reality; Elite-backed Sterilization Much easier to shoot us and be done with it; Exxon Valdez Now Shell seems to be pulling the same stunt, so ban oil! New State Laws “. . . undocumented immigrants younger than 30 and without a criminal record can apply for deportation relief and a work permit. And now, they can also apply for a California driver’s license.”; 2:07:53 doc. Toronto, the G20 and protecting TPTB; N and SKorea So the US can turn its ships round and go home now; Nuke Power The EU says nuke power will stay in Germany for the next four decades. I thought that Germany ran their own country the way they wanted to, not by someone else’s dictates; 1:10:15 doc. Geo- and Bioengineering, aka weather wars; 2:03 clip Looks as if The Borg’s mother ship or Andromeda just blew a gasket; Banished Words.

If your reading was a bit better than your writing, you’d realize that it wasn’t even me that wrote post with “bestest place on earth” about Hongcouver. It was someone else who commented on your deluded state. And you also would have read that I was from Toronto, where we’ve had less snow than that swamp you live in for the past 3 years.
Go feed your dodo birds Billy Bob.

@The Man From Nantucket, post #253;
That’s a good analysis about owning tobacco companies. For the reasons you described, it would be wise to not have too much exposure to this sector. I do, however, have long term faith in this sector. Despite all the anti tobacco campaigns and restrictions on smoking, I still see a lot of younger people taking up the habit. Also, while smoking has declined here in London where I live, the rate of smokers in other parts of the country is still quite high. The examples that come to mind are northern Ontario, and the Atlantic Provinces. I don’t know why, maybe it’s because the cost of living is lower (despite the recent economic boom, housing to rent or buy is still cheaper in Timmins than most cities in Ontario) so residents have far more disposable income. Whatever the causes, there appears to be a steady supply of new smokers buying tobacco products so this sector still has a future.

As for the dividend, 7% is overly optomistic. At the price I paid, my divident is actually 6.6%, which is still quite respectable.

#197 – It will be extremely interesting to see what God has to say about your tobacco investments at your Last Judgment. I (and many other direct and second-hand victims, families, etc.) will be greatly looking forward to it.

Your fate as a result? Not so much. But you knew what you were doing, just like all those people who killed themselves while you made money off their stupidity.

In closing, there are two types of businesspeople. 1, the clinical (albeit law-abiding because of self-interest) psychopaths, without a single shred of empathy for anyone save themselves and perhaps their families, and 2, everyone else.

Given a choice, don’t be the first, no matter how appealing the speed of riches appears in contrast. Like Mitt Romney, there’s always a VERY UGLY horrific surprise along the way. In his particular case, many more times than just once.

But it’s that very last one that’s always going to get the psychopaths. Because, by God or no God, what goes around comes around.

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The views expressed are those of the author, Garth Turner, a Raymond James Financial Advisor, and not necessarily those of Raymond James Ltd. It is provided as a general source of information only and should not be considered to be personal investment advice or a solicitation to buy or sell securities. Investors considering any investment should consult with their Investment Advisor to ensure that it is suitable for the investor's circumstances and risk tolerance before making any investment decision. The information contained in this blog was obtained from sources believed to be reliable, however, we cannot represent that it is accurate or complete. Raymond James Ltd. is a member of the Canadian Investor Protection Fund.